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Protection against uneven demand by maintaining

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Reference no: EM131270751

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Respond to the following item and your colleagues as directed:

  • In the past, inventory was often seen as a great asset, because it provided protection against uneven demand by maintaining "level" production. However, inventory can hide many problems. Today, inventory is seen as a liability, because it ties up capital resources that could be used elsewhere and it drives up costs by requiring additional handling, warehousing, and management resources. Identify a firm currently using a JIT system of materials management and describe the relationships between service level, uncertainty, safety stock, and order quantity in regards to inventory cost efficiency.

Reference no: EM131270751

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